PARIS, April 25 (Reuters) - European shares fell on Friday
as new signs of violence in Ukraine weighed on stock markets
that had recently been buoyed by corporate takeover activity.

Ukrainian forces killed up to five pro-Moscow rebels on
Thursday and Russia launched army drills near the border in
response. Seven people were also injured overnight at a
pro-Ukrainian checkpoint near Ukraine's Black Sea port of Odessa
when an explosive device blew up.

Ukrainian Prime Minister Arseny Yatseniuk accused Russia of
wanting to start World War Three by occupying Ukraine
"militarily and politically", in some of the strongest language
he has used.

Steen Jakobsen, Saxo Bank's chief investment officer and
chief economist, warned that investors have been complacent
about the crisis in Ukraine, ignoring the risks of escalation.

"The market seems willing to give the diplomatic route all
chances despite the obvious violations by both parties. Overall
the situation is escalating by the hour, meanwhile investors are
mostly focusing instead on the Fed's tapering and the ECB's
quantitative easing," he said.
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